According to an analyst from RBC Capital Markets, Apple is possibly preparing to offer the iPhone 3GS free with a two-year contract. Mike Abramsky of RBC stated that Apple is expected to offer this deal when the iPhone 5 releases this year. This approach he claims is one of Apple's many steps to combat the ever-growing Android mobile platform.
In a note to investors, Abramsky provided survey data to show the folllowing:
14% of consumers are either very or somewhat likely to buy an iPhone 3GS if it does become free with a two-year contract. This will exceed the original iPad (13%) and iPhone ($9). Although AT&T already offers a $49 iPhone, Abramsky claims that a $0 provides a significant growth in the "compelling offer" factor.Apple's decision to offer the 3GS deal could increase potential market opportunity and expansion to more than 150 million smartphones says Abramsky. Providing a subsidized plan and iPhone offer, in Apple's mind, could be a strong move against Google and Android's growth.
Because the iPhone 3GS will able to support Apple's new upcoming iOS 5[/URL], the offer may not be such a bad deal. However, this move will be contrary to past actions as Apple has discontinued two-year old phones in the past. For example, when the iPhone 4 released, they discontinued the iPhone 3G. With the iPhone 5 soon to release, will they ultimately discontinue the iPhone 3GS or will Apple hold true to the speculation?